Stocks suffer big weekly loss; Nasdaq below 4,000

NEW YORK (MarketWatch) — The stock market is looking vulnerable after an extended selloff in tech Friday sent the Nasdaq below 4,000 and wiped 1% off the other main indexes.

U.S. stocks built on sharp losses from a day earlier and were hurt by a disappointing earnings report from J.P. Morgan Chase & Co.

The S&P 500
SPX, +0.17%
has retreated in a hurry from its April 2 record close, finishing 4% below that level Friday and under a key chart level, its 50-day moving average.

The benchmark slid 17.39 points, or 1%, to close at 1,815.69, and it lost 2.7% for the week. The Dow Jones Industrial Average
DJIA, +0.29%
shed 143.47 points, or 0.9%, to finish at 16,026.75. The blue-chip index slumped 2.4% for the week, snapping its streak of three up weeks in a row.

The Nasdaq Composite
COMP, +0.00%
slid 54.37 points, or 1.3%, to 3,999.73, closing under 4,000 for the first time since Feb. 3. The tech-heavy index fell 3.1% for the week, with its biggest daily loss coming on Thursday, when traders went after biotech and other high-growth stocks with a vengeance. The Nasdaq endured its worst weekly percentage drop since June 2012, and it has fallen for three weeks in a row.

Some market watchers see further pain for stock investors, but others have stayed bullish. The sharp slide that started in so-called momentum stocks has many talking about a shift in leadership to value from growth now that the current bull market is more than five years old.

“While the market is roughly flat for the year, the recent leadership rotation is causing understandable angst for many investors,” said Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, in emailed comments early Friday. “We remain comfortable with our 2,075 S&P 500 target and cyclical sector bias including overweights in Financials, Industrials, Discretionary and Health Care.”

Golub argued that fundamentally, not much has changed.

“We would be more apt to change this outlook if we saw signs of either fundamental deterioration in the economy or indications that Fed policy was negatively impacting markets,” he said in his note. “Neither of these conditions are present, in our view.”

On the other hand, Peter Cardillo, chief market economist at Rockwell Global Capital, maintained this week marks just the beginning of a sizable slide for stocks.

“What happened yesterday is the start of a correction, an earnings-driven correction,” he told MarketWatch on Friday. He said first-quarter earnings won’t be “overly terrible,” but the latest batch of results, hurt by severe winter weather, will come in worse than in prior quarters.

Among other key movers, the iShares Nasdaq Biotech ETF
IBB, +0.06%
switched between gains and losses before closing with a loss of 2.9%. The ETF fell 4.4% for the week, suffering its seventh down week in a row and closing below its 200-day moving average.

All of the S&P 500’s 10 sectors lost ground Friday, with utilities falling the least, and consumer discretionary and materials faring the worst. With the S&P 500 down 1.8% in 2014 to date, the Utilities Select Sector SPDR ETF
XLU, +0.88%
has become a new market darling, but strategists have offered caveats about the defensive play’s 9.8% rise so far this year.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.